P11-52B Yaeger Company uses budgets in controlling costs. The company based the monthly budget amounts in the (SO 1, 2, 3) report on an expected production of 60,000 units per month or 720,000 units per year. The assembling department manager is Prepare exible budget pleased with the report and expects a raise. The company president, however, is unhappy with the results for August, because reports for varying only 58,000 units were produced. The August 2016 budget report for the companfs assembling department is as follows: situations using the total budgeted cost formula. YAEGER COMPANY Budget Report Assembling Department Month Ended August 31, 2016 Difference: Favourable (F)! Manufacturing Costs Budget Actual Unfavourable (U) Variable costs Direct materials 39 48,000 $ 47,000 $1,000 F Direct labour 54,000 51,300 2,700 F Indirect materials 24,000 24,200 200 U Indirect labour 18,000 17,500 500 F Utilities 15,000 14,900 100 F Maintenance 9,000 9,200 200 U Total variable costs 168,000 164,100 3,900 F (continued) 494 c H A P T E Fl 1 1 Budgetary Control and Responsibility Accounting YAEGER COMPANY Budget Report Assembling Department Month Ended August 31, 2016 (continued) Fixed costs Rent 12,000 12,000 0 Supervision 17.000 17,000 0 Depreciation 7,000 7.000 0 Total xed costs 36.000 36,000 0 Total costs $204,000 $200,100 $3,900 F Instructions (a) State the total monthly budgeted cost formula. 0:) Budget $198,400 (b) Prepare a budget report for August using exible budget data. Why does this report provide a better basis for evaluat- ing performance than the report based on static budget data? (c) Budget $215,200 (c) In September, 64,000 units were produced. Prepare the budget report using exible budget data, assuming (1] each variable cost was 10% higher than its actual cost in August, and (2.) xed costs were the same in September as in August